It was shocking news. After eight decades of ownership, the Graham family sold The Washington Post to Amazon founder Jeff Bezos for $250 million. The announcement stunned everyone, from The Post employees to the media industry.
You have to hand it to them. They kept their courtship of several potential buyers and the impending sale a secret, despite employing some of the best investigative reporters in the country.
Publisher Katharine Weymouth, who is Katherine Graham’s granddaughter, wrote to the staff, “This is a day that my family and I never expected to come. The Washington Post Company is selling the newspaper it has owned and nurtured for eight decades.”
Her uncle, Donald E. Graham, Chairman and CEO of The Washington Post, said, “I, along with Katharine Weymouth and our board of directors, decided to sell only after years of familiar newspaper-industry challenges made us wonder if there might be another owner who would be better for the Post (after a transaction that would be in the best interest of our shareholders).”
It takes courage to admit that you may no longer be the best person to run any business, much less one that has been in your family for generations.
It’s a hard truth and one I’ve had to relate to some of my turnaround clients who have nurtured family businesses for years. It’s tough to tell them that the best thing they can do for the family business is to let it go. It doesn’t matter how many years the family has owned it, how much it meant to Grandpappy, or how tough it is that your generation is the one to lose it. Sometimes if you want a company to survive, the best thing to do is sell it.
It may be time to sell if the heirs that are available in the next generation of management either do not want the responsibility or do not have the capability to run the business successfully. Maybe you’ve received a large offer, one that really is too good to refuse. In both cases, it’s a win for the family to sell the company.
Sometimes the current ownership of a family business just isn’t able to handle the changes in the industry and can’t find a way to keep the company financially viable.
That seems to be the case for the Post. In the first half of 2013, the company lost $49.3 million. Circulation has declined for seven years in a row. The Post has been slow to embrace the digital revolution. It has the fewest digital subscribers and lowest ratio of digital subscribers to print subscribers of any of the top 10 U.S. newspapers, according to an article in Mashable.com.
Bezos may be just what the company needs. Associate Editor Bob Woodward, the Pulitzer-Prize winner for his exposure of Watergate, said in an article in thedailybeast.com, “It’s very sad. But if there’s somebody who can succeed, it’s Bezos. He’s the innovator, he’s got the money and the patience, so we’ll see. I think in some ways, this may be the Post’s last chance to survive, at least in some form of what it was.”
As Donald wrote in the letter to staffers, “The point of our ownership has always been that it was supposed to be good for the Post. As the newspaper business continued to bring up questions to which we have no answers, Katharine and I began to ask ourselves if our small public company was still the best home for the newspaper …. We were certain the paper would survive under our ownership, but we wanted it to do more than that. We wanted it to succeed.”
That should be the goal for any company. Not just to exist but to succeed. And sometimes the best way to ensure that success is to hand it over to someone else.
Totally agree with this post. Many times in business, we tend to latch it on for the sake of ego. But we forget about our mission. If our mission is to help as many people as possible and if someone else can do a better job, it’s time to let it go. Awesome article ! Thanks for the reminder!
I think if there is a better owner for any company and the family is ok with the decision to be sold then this is a good thing. Only time will tell if Jeff Bezos is the best owner for this transaction, right?
Delicately put and a marvelously constructive way of showing businesses and everyone that sometimes you have to just let go because life changes.
I viewed this post to a quirk of history in my own family. My grandfather owned a nice sized diamond ring company. They grew from a few people to a factory on Park Avenue with two hundred employees. Nice size. Then the price of gold went nuts. Since diamond rings center around gold the business was in fluctuation on a daily basis. To big and to small was the problem. The company could not weather out the problem and therefore it was sold to a company looking for a tax loss. Fifty years of productive work to sell with the mind that it was to be a loss on the balance books of an eatery establishment. Mind bending. The owners got five million each and the main employees got a good buy out. The main hurt was to the concept of hard work and progress hitting the wall of economic nonsense. This all happened in the 70’s.
In south Asia (and may be other parts of world too) some family have made business out of politics, and passing it down to generation after generation. I guess that would be one family business everyone would love to see being sold 🙂
As a former Post reader, I hope Mr. Bezos can bring the paper back up to speed. They have gone thru so many cost cuts that they do not seem to have much staff and as a result the paper has shrunk to a very small size.
It baffles me why the Post does not do a more thorough job of covering Fairfax County, a jurisdiction with more than a million people that brags some of the best demographics in the country.
Hopefully under new leadership they will take a second look at the D.C. suburbs. My favorite paper these days is the Wall Street Journal. I wish the WSJ had a DC local edition like they do in New York. Of course, that would be bad news for The Post if that happened.
Best of luck Bezos
Great post! It’s a thin line trying to figure out rather to sell a family business or not. There is a business in my family and I couldn’t think that one of our family members would sell it for any amount of money, but every circumstance in different.
Thanks for this excellent article. I wish my cousins (former business partners) had read it seven years ago. After our fathers died, I knew we didn’t have the leadership in our ranks to keep the business growing. I bailed out shortly before the economy went into the tank. My father and uncle survived many down business cycles. My cousins did not. But it wasn’t the business cycle that doomed the business, it was our lack of ability to take what we had been given and move it forward. I was objective enough to see the “handwriting on the wall.” My cousins had too much false belief in themselves.
Great read, Interesting that sometimes the best thing to do sometimes with a company is just to let it go. Thanks for writing.
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Really thoughtful piece – thank you.
Sales is an important part of business.
Here are some thoughts on sales http://stephenis.com/?p=317
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